Sudeep Pharma IPO Concludes Amid Strong Investor Response
The initial public offering of Sudeep Pharma, which commenced on Friday, November 21, is scheduled to conclude on Tuesday, November 25. The pharmaceutical ingredients manufacturer witnessed overwhelming response from investors, with the IPO getting fully subscribed on the very first day of the share sale.
The subscription status reached 1.42 times on the opening day, indicating robust demand across investor categories. The company has set the price band at ₹563 to ₹593 per equity share, positioning itself in the competitive pharmaceutical ingredients space.
Investor Allocation and Subscription Breakdown
Sudeep Pharma has strategically allocated shares to different investor categories, with up to 50% reserved for qualified institutional buyers (QIBs), at least 15% for non-institutional investors (NIIs), and a minimum of 35% for retail investors. This distribution reflects the company's balanced approach to attracting diverse investor interest.
The subscription data reveals interesting patterns across investor categories. The retail portion was subscribed 1.50 times, demonstrating strong participation from individual investors. Meanwhile, the NII portion recorded 48% subscription, and qualified institutional buyers showed particularly strong interest with their portion receiving 3.00 times bids.
According to data available on BSE, the company received bids for 1,50,09,425 shares against 1,05,64,926 shares on offer by 17:00 IST on the first day.
Grey Market Signals and Listing Expectations
The grey market premium for Sudeep Pharma IPO currently stands at ₹121, indicating positive market sentiment. Considering the upper end of the IPO price band at ₹593 and the current premium, the estimated listing price is projected around ₹714 per share, representing a potential 20.40% gain over the IPO price.
Grey market trends observed over the last eight sessions show an upward trajectory, with experts anticipating a robust listing. The highest GMP recorded so far is ₹130, while the lowest was ₹0.00, demonstrating the volatility and evolving market sentiment.
Grey market premium essentially reflects investors' willingness to pay above the issue price even before official trading begins, serving as a key indicator of market expectations.
Company Fundamentals and Brokerage Views
Based in Gujarat, Sudeep Pharma ranks among the leading producers of food-grade iron phosphate used in infant nutrition, clinical nutrition, and the food and beverage sectors. The company operates six production facilities with a total capacity of 50,000 MT, specializing in minerals including calcium, iron, magnesium, zinc, potassium, and sodium.
Swastika Investmart reported that the company exhibits strong performance with increasing revenues, elevated EBITDA margins, and a noteworthy FY25 return on net worth of 27.88%. The brokerage noted that while the issue appears aggressively priced at a P/E ratio of 45-48x, it reflects the company's current steady profitability.
Geojit Investments indicated that at the maximum price point of ₹593, SPL is trading at a P/E ratio of 48x based on FY25 diluted earnings, which they consider reasonably valued. The brokerage highlighted the company's strong balance sheet, dedicated R&D focus, and continued product innovation as compelling factors for long-term investors.
Both brokerages recommend the IPO for investors with medium to long-term horizons, emphasizing the company's positioning in growth sectors and its expansion plans.
IPO Structure and Key Dates
The Sudeep Pharma IPO consists of a fresh issue of equity shares worth ₹95 crore and an offer for sale of approximately 1.35 crore equity shares totaling ₹800 crore from promoters. The funds raised from the fresh issue, amounting to ₹75.81 crore, will be allocated for capital expenditures related to machinery purchase at its Nandesari Facility 1 in Gujarat, along with general corporate purposes.
The provisional basis of share allotment will be determined on Wednesday, November 26, with refunds scheduled for processing on Thursday, November 27. Successful allottees will see shares credited to their demat accounts on the same day as refund processing.
The much-anticipated stock debut is expected on Friday, November 28, when Sudeep Pharma shares will begin trading on both BSE and NSE. ICICI Securities and IIFL Capital Services are acting as the merchant bankers for the IPO, while MUFG Intime India Pvt. Ltd. serves as the registrar for this issue.
The strong initial response to Sudeep Pharma IPO reflects investor confidence in the company's niche positioning in the pharmaceutical ingredients space and its growth prospects in both traditional and emerging sectors, including the rapidly growing battery-grade minerals market.
